Bitcoin on the verge of further decline?

Tehran - BORNA - Grayscale has warned that if the "CLARITY Act" is not passed this year, the Bitcoin and broader cryptocurrency market may face further downward pressure. According to the firm, delays in the Senate's review of the bill and increased likelihood of sustained high interest rates have weakened the short-term outlook for the crypto market.

The "CLARITY Act" is designed to establish a clear framework for overseeing the cryptocurrency market and has become one of the most important issues for investors. Although the bill passed the Senate Banking Committee with a 15-9 vote, it still needs to pass the full Senate to become law.

Meanwhile, Galaxy Research estimates a 50 percent probability of the act passing in 2026, citing the lack of a clear timeline for a vote and continued disagreements in the Senate.

Zach Pandl, Head of Research at Grayscale, believes that if the CLARITY Act fails to pass this year and the Federal Reserve is forced to raise rates due to persistent inflation, companies holding Bitcoin on their balance sheets – such as Strategy and other Digital Asset Treasury companies – could be affected. This could increase selling pressure in the market, potentially leading to further declines in Bitcoin's price.

Grayscale also noted that beyond legislative uncertainty, factors such as the debt-based financial structure of some Bitcoin-investing companies, reduced leverage in the market, and concerns about digital asset security in the face of quantum computing advancements have also negatively impacted investor sentiment.

However, the firm believes that even with further price declines, the market drop will not be as severe as in previous cycles. According to Grayscale, stronger institutional investor participation and sustained demand for crypto assets could prevent a deep crash similar to past downturns.

Bitcoin News reported that U.S. Senator Cynthia Lummis warned that if the bill fails, establishing a comprehensive regulatory framework for cryptocurrencies could be delayed until 2030, leaving the industry's legal environment in uncertainty.

Cryptocurrency price update for Sunday

Bitcoin is trading at $59,838.31, down 0.47 percent over the past 24 hours and down 6.91 percent over the past week. Ethereum is trading at $1,566.72, down 0.65 percent over the past 24 hours and down 9.55 percent over the past week. Tether is trading at $0.9986, up 0.01 percent over the past 24 hours and down 0.02 percent over the past week. Binance Coin is trading at $555.11, down 1.54 percent over the past 24 hours and down 5.84 percent over the past week. USD Coin is trading at $0.9997, up 0.01 percent over the past 24 hours and unchanged over the past week. Ripple is trading at $1.04, down 0.97 percent over the past 24 hours and down 8.73 percent over the past week. Solana is trading at $70.31, down 1.81 percent over the past 24 hours and down 3.83 percent over the past week. Tron is trading at $0.3215, up 0.38 percent over the past 24 hours and down 1.39 percent over the past week. Hyperliquid is trading at $61.79, down 3.16 percent over the past 24 hours and down 10.93 percent over the past week. Dogecoin is trading at $0.07354, down 2.42 percent over the past 24 hours and down 11.69 percent over the past week.

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